The pound is still strong against the euro and the dollar this morning, holding onto gains made at the start of this week. It strengthened due to waning political risks after the local elections last week and also because of the successful reopening of the UK economy, with restrictions being eased again from the start of next week.
After failing to move the pound last week, possibly due to the local elections, the optimistic tone from the Bank of England last week could also be fuelling the pound this week. They announced that they would reduce quantitative easing and raise economic forecasts due to the reopening of the economy.
Preliminary GDP data released this morning shows that the UK economy shrank by 6.1% year-on-year in the first quarter of 2021 and shrank 1.5% quarter-on-quarter. The quarterly figure is slightly better than the estimated 1.6%.
However, figures also show that there was a 2.1% rebound in March as schools reopened.
